Bill C-27, which is currently before the Senate after passing in the House of Commons last June, gives Veterans Affairs the power to determine whether a military member's medical release is a result of service in the Canadian Forces.
Canadian Forces ombudsman Gary Walbourne says that's a determination that should be made by the Department of National Defence.
The ombudsman's office conducted an extensive analysis of the proposal, which was pushed last year as the government faced criticism for the summary dismissal of ill and injured soldiers, many of them with post-traumatic stress.
Under the existing system, all soldiers have to be considered fit to deploy both overseas and at home. Those that are considered unfit, such as the ones with physical an mental wounds from the Afghan war, are given a set amount of time to recover.
If after at point they still don't meet the universality of service rule, they are released.
In the fall of 2013, a number of troops came forward to complain they were being shown the door just shy of qualifying for their pension.
The government responded by introducing legislation to bump wounded soldiers to the front of the line for federal jobs, as long as they are qualified for the position. It may, however, have the opposite effect, said Walbourne.
National Defence, which has access to medical records and service history information, is in a better position to justify an ex-soldier's medical condition and the reason for the release, he argued.
The way the bill is written, "it could be counter-productive," Walbourne said in an interview. "There is the potential for certain releasing members to not have the right priority status — or be delayed getting on that list."
It's not the first time the two departments and their duelling assessment systems have come under the microscope.
Many ex-soldiers, released from the military on medical grounds, have found doctors contracted by Veterans Affairs don't always agree with the assessments of military physicians. That has, in some cases, led to veterans being denied benefits and services for conditions that cost them their military jobs.
Walbourne said the same general mechanism applies in the case of priority hiring and he doesn't understand why there "needs to be a separate process.
National Defence "knows how the person has gotten hurt," he said.
"We know what happened to him. And we know whether it has happened on the job. I have a real concern. Why would we bring in another process to determine something that has already been determined?"
Walbourne's counterpart, veterans ombudsman Guy Parent, said he agrees with the findings of the assessment.
"Giving ill or injured soldiers speedier access to potential jobs in the public service is vitally important to the (Canadian Armed Forces) members and veterans," he said.
A senior government official, speaking on condition of anonymity, said new Veterans Affairs Minister Erin O'Toole would study the report, noting that O'Toole is committed to "closing the seam between National Defence and Veterans Affairs."
But the official, who was not authorized to discuss the matter publicly, said the legislation may have already passed the point of no return.
Allowing National Defence to be the sole authority over the release of an injured member would requiring rewriting the law governing the veterans department, something that would be a major undertaking, the official said.
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